For Medicaid, ‘Eventually’ May Mean Never

For Medicaid, ‘Eventually’ May Mean Never

Oct. 13 (Bloomberg View) — A spurt of Republican states changing their minds on Medicaid expansion backs up an optimistic argument you hear a lot in health-policy circles: It took a long time for all 50 states to sign up for the original Medicaid program, and the expansion will unfold in the same way — slowly but surely.

If the analogy holds, the takeaway is not to get too concerned about Medicaid expansion: Even the reddest states can only deny federal money to their hospitals, doctors and insurers for so long, which means that poorer Americans in every state will get coverage eventually. The federal government should keep doing what it’s doing — offering compromises, and letting pressure from state lobbying groups do the rest.

But interviews with hospital and insurer associations in states that have yet to expand Medicaid suggest that “eventually” could be a lot longer this time around. If so, the federal government might need a change in tack, as it tries to extend coverage to almost 5 million people.

One problem with looking at Medicaid’s initial adoption is that it can exaggerate how long the program took to catch on in most states. Yes, Arizona waited 16 years to sign up. But the state was an outlier. Thirty-seven states had signed up within the first two years of the program; by the beginning of 1970, just four years after Medicaid started, every state but two — including every state in the South — and Washington, D.C., was taking part.

The 1960s analogy also misses the headwinds Medicaid faces today. The Obamacare expansion started with a rush equal to 1966, with 26 states plus the District of Columbia signing up so far this year, and Pennsylvania set to expand in January. Indiana has submitted a plan, and governors in Utah and Tennessee have talked about applying, too.

But it’s not clear how many of those states’ legislatures will agree, or how many other Republican-led states will follow. And absent a Democratic sweep of statehouses next month, it’s hard to see a second-year wave of a similar magnitude to 50 years ago. In the South, where opposition to expansion seems most entrenched, it’s uncertain whether advocates are making any progress at all.

Take South Carolina, where expanding Medicaid could reduce the number of people without health insurance by one-third. The state waited two-and-a-half years before joining the original Medicaid program. This time around, even that time frame looks optimistic: Jim Ritchie, who runs the state’s association of health plans, said he doesn’t expect any movement until at least 2017.

Rozalynn Goodwin, vice president for community engagement at the South Carolina Hospital Association, suggests a leading indicator for expansion: Out of four crucial groups — hospitals, health insurers, doctors and chambers of commerce — how many have publicly come out in support?

South Carolina is still one for four; even its state medical association won’t back expansion. But at least its hospitals are on board. In Mississippi, even hospitals are reluctant to push for expansion, according to Roy Mitchell, who runs the Mississippi Health Advocacy Program.

“That’s really something that perplexes us,” Mitchell told me, noting that hospitals stand to gain significant revenue if the state says yes. In red states that agreed to take the federal money, he noted, “the provider community were the fiercest advocates for expansion.”

(A spokeswoman for the Mississippi Hospital Association, Shawn Rossi, told me nobody was available to talk. Hospital associations in Georgia, Alabama and Louisiana didn’t respond to repeated requests for comment.)

Not taking a position is one thing. In Alabama, Michael O’Malley, the head of the state’s association of health plans, is openly opposed to expansion — even though, if the state copied the model of nearby Arkansas, where federal dollars are used to buy private insurance, it could mean new business for Alabama insurers.

“I agree, and I think my members agree, that [Governor Robert] Bentley is doing the right thing” by saying no, O’Malley said. In its current form, “expanding Medicaid makes zero sense for Alabama.”

By contrast, insurers in Louisiana, which signed up for Medicaid the first year it could, aren’t hostile to expansion — they just don’t see any point in pushing it. I asked Jeff Drozda, head of the Louisiana Association of Health Plans, why his members hadn’t taken a public position on the expansion, even though it would benefit them. Here’s what he said:

The plans need to make a strategic business decision on whether or not they would want to go out in the public forum like that. Realistically, they realize that it’s a state where both the House and the Senate, and the governor, are pretty much on the same page of not being interested in moving toward expansion this year or next year. It doesn’t benefit anyone to go out there and make those comments if it’s not going to happen anyway.

Of the states I looked at, the only one where I could find even a whiff of optimism was Texas, which signed up for Medicaid the year after it became available but shows no such interest in expansion.

“There’s a slight opening” among some legislators, Lance Lunsford, spokesman for the Texas Hospital Association, told me. But he said you would never know it, because admitting as much is political suicide. It’s fine to talk about the financial benefits of expansion, Lunsford said, until “you realize you’re talking to yourself in a room with the door closed.”

The picture presented by these states isn’t one of commercial interests gradually chipping away at ideological opposition to expansion. Rather, it’s one of a political reality so entrenched that those commercial interests either can’t make headway or don’t bother trying.

Of course, like anything in politics, that can change. But if it doesn’t, Democrats in Congress will need to decide how important it is to fix this, and then consider authorizing still sweeter deals — 100 percent federal funding, perhaps. Or they could expand coverage through other means, for example by making more people eligible for federal subsidies on the state insurance exchanges.­­­

Those seem like improbable solutions right now, especially with Democratic control of the House out of reach until at least 2016. But if the wait-it-out analogy with the 1960s proves to be wrong, then at some point it’s worth looking at alternatives — or admitting that for some states, eventually could mean never.

AFP Photo/Mandel Ngan

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